Simon Birmingham
Photographer: Sam Mooi / Getty Images
Photographer: Sam Mooi / Getty Images
Prime Minister Scott Morrison said on Tuesday that a Chinese ban on Australian coal imports would violate World Trade Organization rules because his government had urged Beijing to resume dialogue to defuse the awkward diplomatic controversy.
More than 50 ships carrying Australian coal are stranded in China after ports verbally told them not to load such exports in October. China’s National Development and Reform Commission on Saturday appeared to formalize those restrictions after approving power plants to import coal without restrictions, excluding Australia, the Global Times reported.
Morrison told reporters that if it proves to be right, such a ban would violate the Free Trade Agreement signed by China and Australia in 2015. “This would have a detrimental effect on the trade relationship,” he said, adding that the confusion of political and trade issues could “create a lot of uncertainty for many business partners”.
Australian coal producers fell on Tuesday. Whitehaven Coal Ltd closed 5.9% lower in Sydney Trade Yangol Australia Ltd fell 8.4%.
Australia is close to taking China to WTO over barley fees
The situation worsened this year after Canberra banned Canberra from building its 5G network on national security grounds and called for an international inquiry into the origins of the corona virus. Beijing has accused Canberra of being a puppet of the United States and interfering in its internal affairs.
China has hit Australian barley and wine with freezing tariffs and told traders to stop buying products including copper, sugar, wood and lobster.
Australia hosted President Xi Jinping’s visit to Australia in 2014 and signed a comprehensive free trade agreement a year later.
Trade Minister Simon Birmingham called a formal coal embargo “indicative of discriminatory trade practices” and called on Beijing to open communication channels to resolve the dispute.
Read more: China’s diplomatic ties with Australia deteriorate
The government is concerned that China’s actions do not conform to the “letter or spirit” of that trade agreement, Birmingham said. He said Australia was very close to suing the WTO over barley tariffs and was considering ways to do so for coal.
“The risk profile of trade with China has grown significantly this year,” Birmingham said.
– With the help of David Stringer